Heart Pump stock’s wild ride ends with $17 billion J&J deal

Heart Pump stock’s wild ride ends with  billion J&J deal

Heart Pump stock’s wild ride ends with $17 billion J&J deal

(Bloomberg) – Abiomed Inc. Shares’ boom and bust’s journey is kicking off with Johnson & Johnson’s offer to buy the heart pump maker for $17.3 billion.

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The stock rose 50% on Tuesday to $377.82 after J&J said it would buy the firm for $380 per share in cash. The stock closed Monday at $252.08, bringing the deal’s premium to more than 50%. Prior to the announcement, Abiomed had lost 30% this year – it now stands at 5.2% for 2022. Meanwhile, shares of Jammu and Kashmir slipped 0.5% on Tuesday.

For years, Abiomed has been among the best performers in the S&P 500 index and among the worst performers, as investor sentiment around its growth trajectory has faltered with the rise in its market value.

BTIG analyst Mary Thibault, who holds a neutral rating on the stock, wrote in an email, “We’ve followed AbioMed for over a decade and it is one of the more volatile, debated names.” Tuesday “From reimbursement concerns years ago to debates about the speed of Impala adoption and various clinical data presentations, ABMD has seen a lot of ups and downs.”

The stock gained investor attention in 2018, rising 73%, making it one of the top performers in the S&P 500 that year amid optimism for its Impala instruments. This was followed by a fall of 48% in 2019, becoming one of the biggest losers for the benchmark index.

The stock closed at its highest level since November 2018 after posting the strongest one-day rise since 1989.

Thibault said the premium AbioMed is getting, as well as a settlement that could make the stock more of $35 per share depending on certain goals, makes it clear that “JNJ is serious about this acquisition.” She does not expect other bidders to emerge.

– With the help of Yiqin Shen.

(Update across the market.)

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